Rizzi Corporation sold a capital asset with a $692,000 book and tax basis for $650,000 cash. This was Rizzi's only asset sale during the year. The sale results in:

Question

Quizplus · Accepted Answer

The sale resulted in a $42,000 unfavorable temporary book/tax difference, as the book basis was higher than the selling price resulting in a loss for book purposes but no tax deduction. There is no indication in the question to suggest a permanent difference.

Rizzi Corporation Sold a Capital Asset with a $692,000 Book